Creating a Fast-Casual Restaurant

in Mumbai

KO-TING CHEN - 311206

MARIA CAIROLI - 311157
FERNANDA DEVARS 310835 ALEXANDROS
DAVVETAS - 311465

MBA
2016.
1

Table of Contents
Statement of authorship
.......................................................................................................
3
1.
Background of Mumbai
................................................................................................. 4
1.1. Economy ............................................................................................................4
1.2. Politics................................................................................................................5
1.3. Social aspects ....................................................................................................5
1.4. Technology ........................................................................................................6
1.5. SWOT of Mumbai as a city ................................................................................7
2.
Mumbai & Restaurant Industry
.................................................................................... 8
2.1. Key drivers and emerging trends for the food industry in Mumbai.....................8
2.2. Issues and challenges for the food industry in Mumbai .....................................8
2.3. Legal Aspects for restaurants ............................................................................9
3.
Fast-Casual Restaurant Concept
................................................................................ 9
4.
Street Food in India
.....................................................................................................
10
5.
MIRCHI
........................................................................................................
................. 11
5.1. Concept............................................................................................................11
5.2. Mission .............................................................................................................11
5.3. Vision ...............................................................................................................11
5.4. Logo and Slogan ..............................................................................................12
5.5. Brand Values ...................................................................................................12
5.6. Competitive Advantages ..................................................................................12
6.
Location
........................................................................................................
................ 12
7.
Market Segmentation and Targeting
.......................................................................... 13
8.
Competitors
........................................................................................................
.......... 15
9.
Positioning
........................................................................................................
............ 17

10. The Four Ps

........................................................................................................
......... 18
10.1.
Product .........................................................................................................18
10.2.
Place.............................................................................................................19
10.3.
Price .............................................................................................................21
10.4.
Promotion .....................................................................................................22
11. Budget
........................................................................................................
.................. 23
12.

Franchise

Opportunities

..............................................................................................
Works

24
Cited

.......................................................................................................
..................

26

APPENDIX

.......................................................................................................
.................... 28

Statement of authorship

We certify that this assignment is our own work and contains no material which has
been accepted for the award of any degree or diploma in any institute, college or
university. Moreover, to the best of our knowledge and belief, it contains no material
previously published or written by another person, except where due reference is made
in the text of the assignment.

Signed:

MARIA CAIROLI

FERNANDA DEVARS

Date: May 3, 2016

KO-TING CHEN

ALEXANDROS DAVVETAS

1. Background of Mumbai
1.1.

Economy

Mumbai is the largest city in India in terms of population with 23 million people, is also
the commercial, financial and entertainment capital of the country. The city generates
7% of the Indias GDP, and its expected to grow more in the future. As a city, it also
contributes with 10% of the factory overall employment and 25% of the industrial output.
33% of the income tax collection is coming from this city as well. In October 2014,
Mumbais GDP was 124 billion dollars and its GDP per capita was 5,900 dollars
(Moonen, 2014).
The cotton textile industry dominates the city; however, Mumbais economic base is
nowadays diversified, petrochemicals, metals, engineering, automobile manufacturing,
food processing and electronics are part of its basic industries (Junior Worldmark
Encyclopedia of World Cities , 2016). Most specialized economies are taking place in
this city such as diamond cutting and movie making.
Tourism is becoming a central source of income for the country. The total tourist visits in
India grew steadily about a 16% in the last years providing significant socio economic
benefits to the country (Tourism Fest 2013, 2013). Nearly every business trip to India
involves a stop in Mumbai, which is the countrys largest metropolitan area. Mumbai is
the city where all major companies are settled as well as the Reserve Bank of India and
the Bombay and National Stock Exchanges (McGinnis, 2011).
Part of it success in economy is thanks to its dynamism and capacity for jobs creation, it
is estimated that Mumbai will become the third largest national economy by 2030
(Moonen, 2014).

1.2.

Politics

India is the worlds largest democracy since its independency from the British in 1947.
The country consists of twenty-eight states and six union territories and the capital is
Delhi. However, as previously said, Mumbai is the principal financial city and is the
capital of Maharashtra State.
The Prime Minister, Narendra Modi since 2014, has the highest political position in India
followed by the president, vice-president and Council of Ministers. As in all democratic
countries, India has the legislative and judiciary powers headed by two houses of
parliament and the Supreme Court respectively. There exist numerous political parties
as they only need to be recognized by four states to become one (Stephen, 2013).

1.3.

Social aspects

India is one of the most populous countries around the world, with over 1.2 billion
people, containing the 17,5% of the worlds population. More than 50% of the population
is below the age of 25 and more than 65% below the age of 35. Hindi and English are
the official languages (Demographics of India, 2016).
Mumbai, also known as Bombay at the past, is the 4th most populous city in the world
and the most populous city in India. A great number of the population of Mumbai are
immigrants that came looking for better employment opportunities. The land in Mumbai
is very expensive and thats why residents of the city often live in cheap housing and
large slums. The city has significant traffic problems because of the high number of the
population.
Religion is a central aspect of Indians life. The major religion is Hinduism, followed by
Islam, accounting for 80% and 20% respectively. These religions influence their
believers eating habits. Hindus, for example, are not allowed to eat beef because
according to there believe the cow is sacred. On the other hand, Muslims dont eat pork

following their believes as well. In fact, the state of Maharashtra banned beef in order to
avoid cow slaughter.
It is obvious, that Mumbai is a city of many faiths, since the cultural diversity is immense
Maharashtrians account for 42% of the population and Gujaratis for 19% (Mumbai
Population 2016, 2016).
Cricket, as well as other sports, is an important feature of life here and found very
popular among most. Yoga is also a very important part of life in Mumbai. They have
also a lot of religious festivals (Gascoigne, 2015). Food and the festivals are the most
important facets of Mumbai's culture. Every Mumbaikar is passionate about the local
street-fare and the lavish celebrations like Ganesh Chathurthi, Diwali, Christmas and
Eid. (Mumbai Comercial Capital of India, 2016).
The youths of Mumbai are lacking of social life, as they spend a lot of hours working.
However, 90% of them dont even think about leaving Mumbai (Roy, 2012).

1.4.

Technology

Currently India is considered in the top 5 countries for growing businesses (Grant
Thornton, 2015) as it has an enormous economic growth potential and it counts with
cheap and educated human resources and is technologically and scientifically
advanced.
Technology has a main role for Indians in order to have better future and decent
standards of living. According to a McKinsey study, India presents 12 technologies that
combined will have an impact of 550 billion to 1 trillion of dollars per year by 2025 in
their GDP. The technologies relevant in this project are the mobile Internet, Cloud
technology, digital payments and intelligent transportation and distribution (Kaka &
Madgavkar, 2014).
India is growing fast and the impact that technology will have in the future will help the
restaurant industry to grow supported in technology, using all possible resources to

improve delivery, the service by improving the efficiency to order and to promote
restaurants with better and technological publicity.
1.5.

SWOT of Mumbai as a city

STRENGTHS

Strong commercial and industrial

base.

Potential workforce and social

capital.

Key Infrastructure linkages to

place within and outside the country,
airports, ports, rail, etc.

Prices.

Attractions such as festivals,

historical monuments, art exhibitions
and potential to be international
destination.

Hinterland advantages because is

one of the fastest growing county.

Mindshare, very good in decisionmaking.

Technologically advanced trading

platforms.
WEAKNESSES

Lack od deporting legal and

regulatory framework to facilitate
investment.

Safety and Security.

Maintenance and Cleanliness.

Corruption.

Begging and Cheating.

Authorities with overlapping roles

and responsibilities.

Limited land mass available for

development.

OPPORTUNITIES

Shift of the global foreign tourist

arrivals from developed economies to
emerging economies.

Reforms to support growth.

Public private partnership for

development.

Enhanced access to markets and

opportunities to attract investment due
to change in policies and globalization.

THREATS
Continuous decline in the global
and Asia pacific ranking.
Frequent depreciation of Rupee
Globalization.
Paucity of fund for infrastructure
provision.
Decelerating economy due to
decrease in manufacturing
activities.

Source: International Journal of Application or Innovation in Engineering &

Management. (Bhatia, 2013).

2. Mumbai & Restaurant Industry

The actual size of the Indian food industry is 247,680 Rupees per year and is expected
to grow at 11% that means 408,040 Rupees by 2018. The market segment is occupied
by quick service restaurants and casual dine-in, accounting for 74%, almost three
quarters of the total chain, cafes represent 12% and finally fine dining outlets, pubs,
bars, clubs and lounges represent the rest (National Restaurant Association of India,
2015).
The middle class is the fastest growing segment of the population. This groups income
growth has impacted positively on the food industry as costumers are spending a
significant portion of their income on eating out.

Additionally, the actual market is

fuelled by young people, the presence of massive investments and working woman.
The Indian Food service Market Forecast to 2015, reports that the food industry will be
growing by 12% in the future years. Currently, many big international companies are
entering the market, and the ones that are already in the market are expanding their
presence all around the country. Definitely this trend will be stronger, in the following
years, providing opportunities to new products. (News18/Indian food industry, 2013).

2.1.

Key drivers and emerging trends for the food industry in Mumbai

Growing of share delivery and take-away formats, focus on costumer

convenience.

Entrepreneurial ventures with new formats, menus and restaurant themes.

Expansion of Indian brands.

Increasing the importance of online and social media food websites and mobile
applications as well.

Increasing the interest from private equity investors in the industry.

2.2.

Issues and challenges for the food industry in Mumbai

Inevitable factors in the economy such as high food cost inflation, increasing

competition and fragmented market.

In the operational challenges of the restaurant will be liquor sourcing, manpower

and fragmented supply chain.

Concerns in high taxes and over licensing.

2.3.

Legal Aspects for restaurants

As in many countries of the world, in India the restaurant industry is regulated. This
means that restaurants have to comply with a set of norms and specifications in order to
be allowed to operate. According to the Food Safety Commissioner for Maharashtra, in
order to operate a restaurant in Mumbai one needs around thirty licenses and
certificates from different governmental institutions such as the Brihanmumbai Municipal
Corporation (BMC), (Licenses to be obtained by Restaurats-Mumbai) Police
Department, State Government, Excise Department and Sales Department. The Central
Government also needs to be approached for Food Safety and Standards Authority of
India license (Lawfar, 2015). These licenses are related to the establishment, health
and medical, pollution clearance and tax registration between other things. The hardest
license to get is the BMC Health Madira License that allows the property to serve
alcohol. Additionally, for a room permit, another nine licenses are requested.

3. Fast-Casual Restaurant Concept

The concept of fast casual restaurant occupies a gray area in the food service industry.
Probably it would be easy to understand fast-casual restaurant in terms of the service,
price and atmosphere are different form a quick service or a casual dinning restaurant.
According to the Fast Casual Magazine, there are four key points that fast-casual
restaurants should have such as service type, atmosphere and dcor, food quality and
menu prices. (Parpal, 2015). In consequence, a fast-casual restaurant could take orders
at a counter, but at the same time offer table-side, pick-up or food delivery as well. One
of the important points in terms of food is that food is not pre-assembled as fast-food.
Additionally, the restaurant decoration should be well-designed and comfortable, it may

suggest a sociable atmosphere and prices will be more affordable than a typical casual
dinning, competition will be fast food prices.
The service style in these types of restaurants usually guest will walk up to a service
counter where they will choose items form a menu board and place their orders with a
cashier. Also, the costumer may choose first the food, and walk along an assembly line
to complete their order, choosing some toppings and pay at the end of the line, similar
to a quick service, in terms of convenience and speed. However, the quality of food is
much better than a quick service.
Some of the differentiations of these restaurants are for example, wiggle room, organic
eatery, affordable menu prices, versatility, and the fact that they attract a lot of adult
clientele, families and students as well.

4. Street Food in India

Nothing represents more the richness of India like their street food that clearly
symbolizes their culture, lifestyle and habits. In Mumbai, no matter the time at night or
day, on the streets there is always a deep-fried, mashed-potato patties (vada-pav), a
pav-bhaji with spicy mashed tomatoes and vegetables. Street food is an important part
of Mumbai.
Often street food reflects culture and traditions, in India there is huge diversity in the raw
materials, as well as in the presentation of street beverages, food and snacks. This type
of business, is usually owned by families or individuals, that try to extend through the
local and informal economy (DNAIndia, 2016).
Despite this type of food is very popular in Mumbai, it involves many problems that cant
be ignored. Currently, most of the street food vendors cook and sell inappropriately,
frequently the place is not clean and well lit, do not practice hygienic method of covering
water and food, the food is exposed to birds, flies, rodent, etcetera which could produce
stomached pathogens such as salmonella, E. Coli, Campylobacter, etc. (Malik, 2014).

One of the main problems is that street food vendors have a lack of basic infrastructure
and services such as potable water, lack of knowledge in basic food safety measures
and poor quality of ingredients as well. (Chakravarty).
Moreover, in India, there are more than 10 million street food vendors (Stephen, 2013)
Mumbai, the most populated city in the country, which counts with the majority of these
hawkers. Historically, this type of businesses didnt have to follow many regulations.
However, in October of 2015, the Bombay High Court, after giving the vendors twomonth notice to stop the practice, directed the police to take action against those who
cook food on the streets in the city without the required license (Legal Aspiration, 2015).
The license is granted only to the registered establishments where the hygiene
standards are in place.

5. MIRCHI
5.1.

Concept

The concept of MIRCHI is to deliver a culinary experience to our costumers by providing

excellent quality Indian street food style where customers can have a break as well as
relate and share with others.

5.2.

Mission

Our mission is to get people together by providing traditional Indian fast casual food in a
healthy and social environment

5.3.

Vision

Our vision is to expand MIRCHI where people share our passion for traditional Indian
food.

5.4.

Logo and Slogan

Slogan: Come and Chill out

Logo: The meaning of Mirchi in Hindi is chili, we decide
to have a chili in our logo to related it.

5.5.

Brand Values

Smart Service: Offer an efficient and diligent service to our costumers

Tradition: Evoke the essence of Indian food by preserving the real and exquisite
taste of street food.

Experience: Provide an atmosphere where costumer feel welcome and can relax,
while they enjoy a tasty meal.

Excellence: give all costumers a complete satisfaction from the moment they
step in until they leave the restaurant

5.6.

Competitive Advantages

Hygiene: Guarantee high levels of hygiene in all operational processes

Quality: Promote healthy habits by providing fresh food options with the highest
standards

Social Environment: Stimulate relationships and networking between our

costumers through our communal table concept

6. Location
An exhaustive analysis has been done in order to decide where is the most suitable
place to open the first MIRCHI restaurant. After interviewing people of Mumbai and
learning about each option, the team chose the Bandra Kurla Complex or BKC, (Figure

1 & 2, Appendix), as it is popularly known. This development was created as a

Secondary Business District (SBD) as an alternative office destination to south Mumbai,
as well as a way to decompress the number of traffic and people going to work in the
city (Jain & Goel , 2015). The complex is located in the north suburbs of the city with
easy access for people living in south, central and north Mumbai. Due to its accessibility
and abundant availability of land, the complex became a very popular location for
corporations to settle; particularly finance and multinational companies. Today you can
find offices and headquarters of Citibank, Standard Bank, BNP Paribas, Bain &
Company, JP Morgan, Google, IBM, Tata Communications and Tata Motors, Insurance
Companies between others. Moreover, in consequence of the complexs exponential
growth, there several real state projects that plan to build residential buildings (Jain &
Goel , 2015) in order to attract people that work in BCK. If these projects are completed,
the population in BKC will raise significantly.
The environment is ideal to open a restaurant since more than 20,000 people work in
the complex and yet the demand is not completely covered.
After a market research through the available commercial spots for rent, the team chose
a place located in the lobby of the Inspire Building (Figure 3, Appendix), which is
currently under construction and is due to finish in three months. It is a strategic
location, as the building is located in the heart of BKC in front of the TGC Financial
building, and next to the Citi Bank Headquarters and Tata Communications building.

7. Market Segmentation and Targeting

The population present in Bandra Kurla Complex consists mainly of people who work in
those buildings. However, each customer group in an eating-out market may want
different products; hence, a restaurant cant serve all customers with all equal
effectiveness (Kotler, Bowen, & Makens, 2014, p221).
In order to define operations and design of the restaurant is important to identify the
distinct groups of consumers present in the surroundings of the chosen location. In

Bandra Kurla Complex the team distinguished three main market segments. The first
group is businessmen and women who work in the companies previously mentioned.
These individuals, in general are over 40 years old, occupy high positions in their
respective firms and are the ones who make the strategic decisions. Naturally, they
receive high salaries and have high life standards. Their social needs, while they are at
their workplaces are primarily status, recognition, high level service and comfort in order
to lead a meeting without inconvenient or meet colleagues for lunch.
The second group identified is conformed by the young professionals. The individuals in
this segment are around the 20s and 30s years old and come from mid-high class
families. They have a professional degree. However, because of their short experience
they generally cover the mid-low positions of the companies. In relation with their jobs
and responsibilities, their salaries are significantly lower that the businessmen.
Additionally, they have high professional aspirations that is why they find themselves
working in multinational companies where they can accumulate experience and
eventually grow to higher positions.
A common day in the working life of these young professionals, would start in their
family house, then commuting to the Bandra Kurla Complex with their own cars and
arriving punctual to their respective jobs around 8 and 9 oclock. Then, they would work
on the tasks their bosses required them to do and present it diligently. Around noon,
they would have a break around 45 minutes long to have lunch and would be expected
to arrive back to the office. The afternoon would be similar to the morning duties until 5
pm when they will leave their office, except if they are required to stay. After that they
would go back home, work out or meet friends.
Considering what is mentioned above, these people were born between the 1980 and
the end of the millennium they are considered part of the Millennial Generation. Across
most of the world Millennials make up at least a quarter of the total workforce, however,
in India that number is significantly higher over 50 percent (INSEAD, 2014, p5). Despite
their nationality, this generation share common interest like their interest in leadership

positions and expectations to advance rapidly in their careers, they care about finding a
balance between personal development and work life. Besides, one common thing of all
millennials is that have grown up with digital technology and social media as integral
and natural parts of their lives (INSEAD, 2014, p4).
Regarding their eating habits, this segment does not count with the same time and
budget to have lunch in fine restaurants during the whole week. Consequently, they
prefer to have lunch in a place that they can afford as well where they wont spend so
much time.
Last but not least, this area receives a significant number of foreign people that come to
do business in the diverse companies mentioned before. These business people could
be willing to try traditional Indian street food as part of their experience in the country.
However, because of hygiene reasons they would be careful where and what they eat.
Mirchi could cover this unsatisfied segment of the market by offering good quality and
hygienic traditional Indian food to overseas visitors.
Once identified the segments of the market present around BKC, the team had to
decide which segment the restaurant will target. Considering the different profiles and
the fast casual concept of the restaurant, the team decided that the restaurant would
concentrate on the young professionals and foreign business travellers.

8. Competitors
In the Bandra Kurla Complex, people have several options to have lunch, hence
potential competitors of Mirchi. The whole supply of eating-out in the area has been
analyzed and categorized considering their products, prices and service levels.

Establishments that sell similar products but at different price and service
level

Restaurants that sell Indian food are considered competitors. However, what
differentiate them from Mirchi are their menu prices and services provided. Following

these characteristics, the team identified both very high-end restaurants or simple stalls
that sell Indian food.
Restaurants like Not really Indian, Masala Library and Jyran are examples of more
expensive and refined restaurants. They are located in premium spots as in the Sofitel
Hotel, and provide a gourmet selection of dishes.
On the other side, in a lower category we found informal street vendors that provide
cheap street food in the surrounding of BKC. These are very few as they are restricted
in a specific area near the Complexs parking. The food offer is similar to Mirchi,
however the quality of the ingredients is very poor and there is no place for the
customers to sit down. Aligned with the products and services, they provide a price per
meal that is between Rs 60 and 80.

Establishments that sell similar products and services

We understand similar products are the ones that have alike characteristics for example
the speed of delivery, take out option and customizable as well as similar selling price.
The following table presents an analysis of the restaurants previously mentioned and
considered direct competitors. It includes the name of the property, type of cuisine, the
average price (rupees) and consumer feedback found in Zomato.com (Indian
Restaurant platform). As it can be seen, the competitors are fast food restaurants that
offer American or international food. The team identified an opportunity in the market as
there is no fast casual restaurant that offers traditional Indian food. Additionally, taking
into account the fact that young professionals spend long hours in the office the
objective is to provide a place where these people can have a break, meet friends and
get out of the working routine.

Average Price
per Meal

Name

Cuisine

Pizza
Hut

Pizza / Fast
Food

300

Subway

American

150

8 Food

Healthy
Food, Fast
Food,
Salad

Pizza,
Biryani,
Box 8
Fast Food,
Salad,
Healthy
Asian,
Korean,
Busago
Vietnames
e, Thai

200

Consumer Feedback
Not a very good place to have
pizza these days really.... should
pay attention towards quality
control issues
It's the most convenient place to
eat. Here almost all near by office
people come to eat as it's located
at near all big shot offices and
schools. It has a good place to sit
there.
This is my favorite place to order
from. The variety of salads,
soups, sandwiches they have is
pretty amazing. You can
customize your sandwich, you can
make your own salad, they score
extra brownie points with such

150

This place in BKC is cheap and

easily approachable but sadly that
is all it is. The food is barely
edible.

300

The place is tiny and the service is

average. However, the smashing
food more than compensates.

9. Positioning
After choosing the target market segments that the company will focus, we have to
position our product in those segments (Kotler, Bowen, & Makens, 2014, p. 222). We
need to define the place our product occupies in our target segments mind relative to
competing products. In order to do that, we need to define our competitive advantages,
that will differentiate our restaurant from our competitors.
Possible competitive advantages of our restaurant are: Hygiene, quality and social
environment. As the more distinctive and important competitive advantage we choose
the quality factor. Quality is one of our priorities and we identified that our company can

offer food in a higher quality than our competitors located in Bandra Kurla Complex. The
food option will be fresh and healthy and the standards of the food quality will be very
high. Another competitive advantage that can distinct us from our competitors is the
hygiene factor. The hygiene is a difference that is communicable and visible to our
customers, because we will have an open kitchen and everyone will be able to see the
process that our materials go through. The open kitchen concept is adopted, in order to
prove to our customers that the food is going through all the necessary operational
processes and show to them that we care about their well-being and health.
Positioning Statement: For young professionals, Mirchi is the best place to eat street
food while socializing with co-workers among all the other eating out options in BKC
because hygiene and quality are our top priorities. Unlike fast food restaurants, Mirchi
provides a variety of food choices in low prices and operational excellence.

10. The Four Ps

10.1. Product
Nowadays customers have higher expectations, more choices and more marketers
competing for their attention than ever before. Creating experiences that are compelling
and distinctive by developing a new product or service, covering all customers needs
and expectations. We believe our concept will add value to the city of Mumbai, in
particular to the area of Bandra Kurla Complex.
Taking into account the fanaticism that Indians have for street food we propose an
innovative concept of a fast casual restaurant. Our idea was to use the street vendors
weaknesses and make them our strengths, being those lack of hygiene and poor
quality. That way, Mirchis will cover those opportunities by complying with hygiene and
quality standards.
Mirchis products, will be inspired by traditional street food. The main idea is to have an
electronic board that shows images of our products and all possible options to combine.

As shown in the figure 5 at the appendix, there will be three main options consisting in:
rice, salad or roti roll. Then, customers can customize them according to their
preferences, choosing from an extensive list of possible ingredients and sauces to add.
As we know, in India there is a large number of vegetarians, that is why our menu has
options for them and gluten free as well. Likewise, following Maharashtras regulation
the restaurant will not sell any type of beef.
The presentation of the food will be made in a very simple way. It is important to
mention that Mirchi will provide three different type of services: in the restaurant,
delivery and take away, in order to satisfy the needs of all customers.
All the ingredients used to prepare the dishes are fresh and with the highest quality,
supplied by the local community. Likewise, Mirchi wants to differentiate themselves from
the competition through ensuring food preparation processes, so it will have clear and
defined processes to ensure no food contamination, cross-contamination and adequate
hygiene both from the employees and the items used for the preparation.

10.2. Place
As Mirchi strongly believes that food preparation processes must be transparent, the
place was designed in order to allow customers to observe and verify the cleanliness of
the processes. As shown in the building floor plan (Figure 4, Appendix), the kitchen is
open so customers can get to the counter and see all food handling. Additionally, a big
glass wall facing the exterior will be placed to let the customers see the kitchen interior.
In order to understand the display of the restaurant with more detail, the customer
journey inside the restaurant was broken down.

The customer journey:

i.

Enter the restaurant: The restaurant will have two entrances, one from the street
and the other one inside the building in order to attract people passing on the
street and people working inside the building.

ii.

Queue: There will be a long counter where consumers line up to order their meal.

iii.

Analyze menu: The options and prices will be displayed in a digital menu over
the counter to facilitate the decision before ordering. This counter has direct
contact with the open kitchen

iv.

Choose between 3 main options (roll, rice or salad): The interaction with the
employee starts by ordering between the 3 main options available.

v.

Add toppings: Kitchen and food preparation areas will be in front of the
customers in order to provide complete transparency. That way the customers
will be able to observe every step of their meal production and evidence the
freshness, cleanliness and variety of the ingredients.

vi.

Pay at the counter: the cashier is going to be located at the end of the counter,
where the interaction with the employees finishes

vii.

Go to Sit: There will be only communal tables as well as a bar looking to the
exterior of the restaurant. The dcor in general will follow a minimalist concept.

viii.
ix.

Eat
Interact: The intention of shared tables is to encourage interaction between
commensals. The restaurant will provide as well high speed WI-FI and charging
spots for customers to use their electronic devices for work or entertainment.
Furthermore, table games like Jenga, Mastermind, card games and domino will
be available in order to provide diversion options to the customers. Additionally,
the restaurant will have a live digital screen in the restaurant where customers
will be able to see customers Instagram and Facebook posts related to Mirchi.

x.

Exit

xi.

Reflection: Through Mirchis social media channels the customers will be able to
make comments and give their feedback.

10.3. Price
Price is the third category of the marketing mix. Price is defined as the total money that
the customers need to pay in purchasing the products or services (Armstrong & Kotler,
p. 80, 2015), so the company needs to set a good price to attract customers (McDonald
& Kolsaker, p. 496, 2014).
The overall pricing strategy of Mirchi has to be aligned with the companys business
objectives and competitive advantages. Consequently, taking into account the
restaurants production costs, the target consumers, the value perceived and the
competitors prices, a pricing strategy is defined (Kotler, Bowen, Makens, p. 327-331,
2014). Additionally, it can be stated that a hidden price of Mirchi is the sense of social
status that clients may acquire as Mirchi customers.

Cost-Based Pricing

The first thing taken into account to decide the price are the costs involved in the
production of the dishes, these are food, labor and fixed costs. After determining this,
the company applies a mark up in order to perceive revenue.

Value-Based Pricing

Additionally, the company will set the price based on the value that is perceived by the
customers. For example, Mirchi Restaurant will offer traditional Indian street food and
beverage based on its hygiene, fresh, and high quality products. Considering the market
research, we understand that the defined target consumer is willing to pay a bit extra for
the additional product attributes Mirchi offers. This is to avoid overprice or underprice
that can affect the restaurants sales (Kotler, Bowen, Makens, p. 329-330, 2014).

Competition-Based Pricing

For pricing based on competitors, we made a research in the area where the restaurant
will be located. It is important to analyze all the possible competitors even though they

might not be in the same service category. In BKC our competitors are mainly fast food
and fine restaurants, therefore, Mirchi being a fast casual restaurant will cover an
unsatisfied market opportunity. Having this in mind, the average price of Mirchis
products will be around 200 rupees, positioning Mirchi in between those two type of
restaurants.
Finally, Mirchi Restaurant should keep a good relationship with its suppliers because
the business depends on them. If the of cost of materials change it will affect directly the
final product cost (Armstrong & Kotler, p. 95, 2015).
The combination of all the tools mentioned above will be used to determine the prices of
Mirchis menu prices.
10.4. Promotion
In order to attract a lot of customers it is not enough for a company to develop a good
product and price it correctly (Kotler, Bowen, & Makens, 2014, p. 362). Every company
needs to communicate its product to its target segment and promotion is the way to
achieve that. Promotion can be broken down to advertising, sales promotion, personal
selling, public relations and direct marketing. Mirchi will focus on advertising and sales
promotion as a starting point and according to the improvement that the company will
have, it will proceed to use the rest of the promotion tools.
10.4.1.

Advertising

Advertising is mainly used to reach many people in a short period of time. However, it is
impersonal and its results are not definite (Kotler, Bowen, & Makens, 2014, p. 378). The
main way to promote and communicate Mirchi to customers is through flyers. The flyers
will be distributed in the surroundings of the restaurant and will include the menu and
the opening date, in order to attract more customers. Another way to advertise Mirchi is
by placing advertisements on billboards around the buildings located at Badra Kurla
Complex. This way might be quite expensive so we will try to minimize it.
The main focus of the advertisement campaign is through social media. Mirchi will have

an account in Facebook and Instagram (Appendix, Figure 6), where customers can
follow and learn about the latest discounts or the dish of the day. Moreover, customers
can win special offers or free meals by posting their photos with a hashtag #Mirchi. The
advertising team can also use youtube effectively, by posting all Mirchis advertisement
there.
10.4.2.

Sales promotion

Sales promotion is all about giving your customers incentives to encourage them to buy
your products. This promotion tool has quick results, but in a short-term (Kotler, Bowen,
& Makens, 2014, p. 379). The main idea, is to create a mobile app, where all customers
can find different discounts in different days. In the app, they will have the ability to see
all the information related to their loyalty cards. Furthermore, the app can be used to
order online food and get discount up to 10%. If you take away, you can get 5%
discount extra.
As we consider word of mouth very important to gain more customers, during the first
month the restaurant will give discounts to customers that come with one more friend.
Another way to promote the restaurant is through coupons that will be distributed and
customers can redeem them to get discount on their food.

11. Budget
Starting a business is never easy, especially when there are many formalities when
opening restaurants. It is always important to consider all possible expenses and make
a budget, however it is normal that the budget is not totally accurate and that is why at
the end may be a difference between budgeted and real spent.
Mirchis budget is divided into three parts. First, we present the budget based on
income, the purchase of kitchen equipment, furniture, decoration, insurance, and
service equipment. The second part of the budget takes into account the average

monthly operative expenditure as well as the wages of workers. And finally, a marketing
budget, which covers advertising costs in order to position the brand.
As is shown in one of the tables, the total investment that is needed to open the first
Mirchi Restaurant is equal to 4,984,446 rupees ($75,521 dollars)

Monthly Expenses
Salary (7)

140,000.00
Electricity

4,850.00
Maintenance

5,000.00
Gas

2,350.00
Water

2,620.00
Rent

199,000.00
TOTAL

353,820.00
Advertising
Flyers

Billboards

Social media

TOTAL

12.

8,000.00
25,000.00
25,000.00
58,000.00

First Investment
Rent
Forniture
Equipment for kitchen
Utenciles
Electronic board
Air-conditioner
Insurance
Decoration
TOTAL
TOTAL INVESTMENT

199,000.00
1,285,450.00
1,887,317.00

780,659.00

200,000.00
$ 140,000.00

45,000.00

35,200.00
4,572,626.00
4,984,446.00

Franchise Opportunities

The first restaurant in BKC will work as a pilot in order to measure its success.
Assuming that the concept will be successful, there is a long-term plan to create a
franchise with the brand. As seen in the background analysis, Mumbai is the most
populated city in India, hence there exist expansion opportunities through opening new
stores around the city. After doing a market research, our target customers potential
good locations for opening Mirchi Restaurants in Mumbai are: South Mumbai (City
center), Lower Parel, Vile Parle, Nariman Point, Carter Road and Prabhadevi.
Additionally, as the street food is popular everywhere in India the brand could expand to
other states as well. However, as each area has its own favorite dishes, Mirchi will
adapt to the local taste of each city or state. For example, in Delhi one of the most

popular street food in Chole Bhature, in general eaten for breakfast. The people of
Kolkata on the other side are enthusiasts of the egg rolls and the ones who live in
Bangalore like the Akki riti (Hot Indian Recipes, 2014). By adding the locals favorites
into the menu, Mirchi has higher chances of succeeding in those new places.
Additionally, the brand could work outside India too. According to the latest UN
International Migration Report (2015, p1), India has the largest population living abroad
with 16 million people. Indias diaspora is spread in several countries, however you can
find significant numbers of Indians in the United Arab Emirates (3 million), Pakistan (2
million) and USA (2 million) (United Nations, 2015, p19). Indians living abroad could be
the early adopters of Mirchi particularly because they are a culture that enjoys and
misses their traditional food when they are away from home.
Furthermore, other possible destinations where Mirchi could be exported are the ones
that have similar type of food. As its known, Indias food is one of the spiciest of the
world so countries like Mexico and Thailand where chili and spicy food is common it
would be possible to introduce Mirchis concept.
In order to create a franchise, it does not only require to have a successful product and
concept but also to have as well brand consistency, standardized processes and
management support (Kotler, Bowen, & Makens, 2014, p366).
It is important that customers who visit Mirchi in either Mumbai or Delhi find the same
type of product and service in both. For this reason, it is fundamental that all the stores
keep the same appearance, as well as the advertising and branding. The consistency of
the product is as well important, it means that the quality, execution and packaging of
the food has to remain the same in all stores. (Networld Media Group , 2015). If the
common experience between stores is absent, the brand will be unable to form strong
connections with the consumers.

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APPENDIX

Figure 1: Bandra Kurla Complex Map

Figure 2: Bandra Kurla Complex Photo

Figure 3: Inspire building, where Mirchi restaurant will be located.

Figure 4: Layout of Mirchi Restaurant

Figure 5: Mirchis Menu

Figure 6: Instagram account for Michi restaurant